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Tempur Pedic International (TPX)
Q4 2011 Earnings Call
January 24, 2012 5:00 pm ET
Barry Hytinen - Senior Vice President of Financial Planning & Analysis, Investor & Media Relations & Competitive Intelligence
Dale E. Williams - Chief Financial Officer and Executive Vice President
Mark A. Sarvary - Chief Executive Officer, President and Director
Budd Bugatch - Raymond James & Associates, Inc., Research Division
Bradley B. Thomas - KeyBanc Capital Markets Inc., Research Division
Joshua Pollard - Goldman Sachs Group Inc., Research Division
Leah Villalobos - Longbow Research LLC
Peter J. Keith - Piper Jaffray Companies, Research Division
John A. Baugh - Stifel, Nicolaus & Co., Inc., Research Division
Eric Hollowaty - Stephens Inc., Research Division
Jon Andersen - William Blair & Company L.L.C., Research Division
Robert S. Drbul - Barclays Capital, Research Division
Keith B. Hughes - SunTrust Robinson Humphrey, Inc., Research Division
Joseph Altobello - Oppenheimer & Co. Inc., Research Division
Previous Statements by TPX
» Tempur Pedic International's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Tempur Pedic International's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Tempur Pedic International's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Thanks, Matthew, and thank you to everyone for participating in today's call. Joining me in our Lexington headquarters are Mark Sarvary, President and CEO; and Dale Williams, Executive Vice President and CFO. After prepared remarks, we will open the call for Q&A.
Forward-looking statements that we make during this call are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements, including the company’s expectation regarding sales and earnings, involve uncertainties. Actual results may differ due to a variety of factors that could adversely affect the company's business. The factors that could cause actual results to differ materially from those identified include economic, competitive, operating and other factors discussed in the press release issued today. These factors are also discussed in the company's SEC filings, including the company's annual report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors. Any forward-looking statement speaks only as of the date on which it is made. And the company undertakes no obligations to update any forward-looking statements.
The press release, which contains a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures, is posted on the company's website at tempurpedic.com and filed with the SEC.
And now, I would like to welcome our group, our new Vice President of Investor Relations, who joined us earlier this month. Last year, I took on additional responsibilities as Senior Vice President of Global Business Development in addition to IR. And over the last year, our business development initiatives have ramped and Mark's hiring will allow me to be fully dedicated to this area. As many of you know, Mark has covered the company as a self [ph] analyst for many years, and was twice named Best on The Street by the Wall Street Journal for his coverage of home construction and furnishings. Mark reports directly to Dale Williams, and he's joining us on the call today.
And now with that introduction, it's my pleasure to turn the call over to Mark Sarvary.
Mark A. Sarvary
Thanks, Barry. Good evening, everyone, and thanks for joining us. We're pleased with the performance throughout 2011, and the fourth quarter was a good end to a very strong year. Fourth quarter sales were up 25% and earnings per share increased 27%. For the year, sales were up 28% and earnings per share increased 47%. In a few moments, Dale will provide details of the fourth quarter and full year financial results, as well as our 2012 guidance.
But first, I'd like to talk about the progress we made on our key strategic initiatives in 2011 and discuss the key drivers for the company in 2012. Just as a reminder, our 4 strategic initiatives are: number one, make sure that everyone knows that they would sleep better on TEMPUR by investing in brand marketing; number two, make sure that there is a TEMPUR mattress and pillow that appeals to everyone by expanding and strengthening our product line; number three, make sure that TEMPUR is available to everyone by gaining broad, high-quality distribution; and number four, make sure that we continue to deliver the best sleep by investing in R&D and consumer research. We have made progress on all these initiatives in 2011.
Sales growth were strong both in the U.S. and overseas, and we have gained share domestically and around the world. This growth was driven primarily by the success of our new products and our increased investments in advertising, as well as by continued expansion and distribution.
The new Cloud Collection continues to grow in the U.S. and has been very successful in its first year of launch internationally. The Contour Collection, which was launched in 2011 in the U.S., has also exceeded our expectations. We increased our brand advertising to record levels with our total investment in 2011, almost $150 million. The Ask Me campaign in the U.S. continues to be successful with communicating the benefits of TEMPUR and it's a flexible platform that allows us to focus communications as appropriate. The Weightless campaign, which we launched in Germany, France and the U.K., has also proved successful driving incremental volume in each of these countries.
We've also gained substantial distribution stores and slots both in the U.S. and overseas. As the Cloud line ramps internationally, we've increased the number of TEMPUR slots with our retailers in every market.